Bank of Japan Ends Negative Rates Era with First Hike Since 2007
The Bank of Japan raised short-term interest rates to 0.75% in a historic shift from its decades-long ultra-loose monetary policy. This marks the first hike since 2007 and lifts Japan's benchmark rate to its highest level since 1995.
While policymakers emphasized real rates will remain deeply negative, the MOVE signals growing confidence in Japan's economic recovery. Inflation remains stubbornly above the 2% target, with March core CPI at 2.8% - prompting the central bank to cautiously normalize policy.
The yen initially weakened on the news as traders priced in a still-accommodative stance. cryptocurrency markets showed muted reaction, though the decision may indirectly affect risk assets by altering global liquidity dynamics. Bitcoin held steady near $63,000 while Ethereum consolidated at $3,400.
